A Tale of Two Jobs: One Lost, One Gained

By JAMES CARNEY and ADAM ZAGORIN

Until last week, anyone paying attention to the debate over a proposed trade pact between the U.S., Canada and Mexico might have concluded that there was no debate at all. For months, opponents of the North American Free Trade Agreement enjoyed no competition in their campaign to persuade Americans that NAFTA is a job-killing scheme cooked up by greedy corporate honchos and foreign lobbyists. So one-sided did the argument seem that it began to produce "a giant sucking sound," not of American jobs flowing to Mexico, as Ross Perot swears will happen under NAFTA, but of congressional support for the trade pact going down the drain.

Just when it appeared he might permit NAFTA to die rather than risk having it dilute support for his health-care plan, Bill Clinton gathered three former Presidents to the White House last week and delivered a lectern-thumping speech on the job-creating virtues of free trade, the unparalleled productivity of the American worker and the irresistible winds of change in the global economy.

The treaty, which would eliminate most trade barriers between the three countries within 15 years, has overwhelming support among economic thinkers. Of 19 major studies of NAFTA's impact, 18 predict that by expanding American exports, the agreement will bolster the U.S. economy, raise average incomes and increase overall employment. The basic argument appeals to common sense: since Mexican tariffs on imports are almost double those imposed by the U.S., the elimination of those duties should favor American exports. In the six years since Mexico began liberalizing its economy and lowering trade barriers, annual U.S. exports to the country have risen from $12 billion to nearly $41 billion. That in turn has transformed a U.S. trade deficit with Mexico of $5.7 billion in 1986 into a $5.4 billion surplus last year.

In the end, NAFTA's chances of passage will depend on who wins the jobs debate. Perot predicts that the treaty will put 5.9 million jobs in jeopardy as U.S. companies are lured across the border by cheap labor, a figure dismissed as preposterous by most economists. The Administration promises the job losses will be minimal and that NAFTA will create 200,000 new, skilled positions in the treaty's first two years. Why? Wages are only one factor in a company's decision about where to locate. Critics of NAFTA have overlooked such factors as America's higher worker productivity, superior transportation and more reliable legal system. While in the short run NAFTA may cost the U.S. jobs in low-skilled, low-wage industries like garment manufacturing and citrus production, the agreement will foster a great number of higher paying U.S. jobs in such areas as telecommunications, chemicals and heavy machinery.

So far, however, the consensus of experts is not enough to convince lawmakers on Capitol Hill, especially Democratic Congressmen who rely on the traditional support of organized labor, which opposes NAFTA. The Clinton Administration hopes to lure some Democrats with a promise to provide job training to those who do lose their jobs to increased competition from Mexico. But even with substantial support from Republicans, who generally back free trade, Clinton will need to secure the support of at least 100 House Democrats before NAFTA comes to a vote later this year. Right now he has fewer than 40.

With reporting by Nancy Traver/Washington